Monday 27-02-2017 Outlook

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Welcome to the easyMarkets weekly outlook starting this Monday 27 February. We’ll be looking at the week’s key economic events on the financial calendar covering Monday to Thursday. Be sure to catch up with our Friday morning report that looks back at how the events played out. The week, we see some of the more important indicators coming from the US, Canada and Australia.

Event: US Durable Goods Orders (January 2017)

Date: Monday 27 February 2017 at 13:30 GMT

Markets affected: EUR/USD, GBP/USD, USD/JPY

Trending hashtags: #usd

Orders received by manufacturers for durable goods declined during the last month of 2016 by 0.4% and surprised the markets. The decrease was driven by the decline in military aircraft whereas orders for machinery, electrical and communications equipment increased by 0.8% and this is a sign that the US economy might head to a good start during 2017. Excluding the transportation sector, orders increased by 0.5% during December 2016. Durable Goods orders are forecasted to increase by 1.9% for January.

Event: US Consumer Confidence (February 2017)

Date: Tuesday 28 February 2017 at 15:00 GMT

Markets affected: EUR/USD, GBP/USD, USD/JPY

Trending hashtags: #usd

Consumer Confidence decreased to 111.8 during January, the highest level in 15 years, compared to the previous month’s reading of 113.7 whereas forecasts were for a drop to 112.6 only. The decrease was predominantly driven by less optimistic forecasts on business activity, the job sector, and wage growth. Regardless of that, they also believe that the world’s largest economy will continue growing through the year. Analysts expect February’s Consumer Confidence data to decrease to 110.9.

Event: Australian GDP Data (Q4 2016)

Date: Wednesday 01 March 2017 at 00:30 GMT

Markets affected: AUD/USD, , EUR/AUD, AUD/JPY

Trending hashtags: #aud , #gdp, #aussie

The Australian economy shrank by 0.5% during Q3 2016 following an increase of 0.5% during the previous quarter and surprised the markets as there were expectations for a 0.2% expansion. Last time the economy showed a negative performance was five years ago, but it is estimated that this trend will be reversed back to growth due to the recent increases in commodity prices. The overall decrease was driven by a fall in building activity by 3.6%, whereas financial services, real estate and administrative services also performed lower than forecasted. GDP data would have been even lower if the agricultural sector did not register 7.5% increase. There are expectations for the Q4 2016 GDP to increase by 0.7%.

Event: Bank of Canada (BOC) Interest Rate Decision

Date: Wednesday 01 March 2017 at 15:00 GMT

Markets affected: USD/CAD, EUR/CAD

Trending hashtags: #loonie, #boc

The BOC decided to not change its interest rate level from 0.5% as there is still significant economic volatility in the United States, United Kingdom, and Eurozone. Governor Stephen Poloz voiced his concerns about the U.S. trade policies and how these would have an impact on Canada’s economy whereas it is not easy for the central bank to make economic forecasts due to uncertainty. However, the bank revised its projections for this year’s GDP to 2.1% notwithstanding the strong Canadian dollar that may discourage exports.

Event: US Initial Unemployment Claims (week ended 24 February)

Date: Thursday 02 March 2017 at 13:30 GMT

Markets affected: EUR/USD, GBP/USD, USD/JPY

Trending hashtags: #usd, #unemployment

The number of people applying for unemployment benefit for the first time for the week ended 17 February increased to 244,000 compared to 238,000 during the previous week. Nevertheless, the four week weighted average decreased to 241,000, the lowest level of more than forty years and this is a sign of a healthy labour market. There are expectations for initial unemployment claims to increase marginally to 245,000.

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